Equivalent of TIPS in Australia

Discussion in 'Share Investing Strategies, Theories & Education' started by jms, 5th Jan, 2008.

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  1. jms

    jms Member

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    What is the equivalent of TIPS ( US Treasury Inflation-Protected Securities ) in Australia ? Is there one ?
     
  2. jms

    jms Member

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    Found it.
    If anyone is interested, it is called Treasury Capital Indexed Bonds.
     
  3. jms

    jms Member

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    Now confused. The site says that you can invest a minimum of AU$1,000 and in multiples of AU$1,000 ( 5: How much can I invest? ):

    RBA: Buying Bonds from the Reserve Bank

    But the T&Cs say the minimum is AU$100,000 and then in multiples of AU$1,000 ( under size of bids ):

    http://www.rba.gov.au/FinancialServices/CGSTenderInfo/terms_and_conditions_ib.pdf

    Anyone done this yet and can tell what's the real minimum ?
     
  4. jms

    jms Member

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    Confirmed from the RBA that it's AU$1,000 minimum. Not that I would buy it now ... I was just reading Graham's book where he mentions that your portfolio should include bonds as an "insurance" policy against inflation.
     
  5. Redwing

    Redwing Well-Known Member

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    I see this started recently, subject to AUD-USD fluctuations also

    Inflation-Protected U.S. Treasury Bond Currency Hedged ETF

    Fund Objective
    UTIP aims to track the performance of an index (before fees and expenses) that provides exposure to a portfolio of US Treasury Inflation-Protected Securities (‘TIPS’), hedged into AUD.

    TIPS are a type of government bond issued by the US Treasury, whose face value and interest payments are adjusted for inflation, as measured by US CPI.

    Benefits of UTIP
    • Inflation-protected principal and income
      TIPS provide protection from a higher inflation environment by indexing both principal and coupon payments to the US CPI.
    • Potential defensive benefits
      As part of a broader portfolio, UTIP may provide defensive benefits during times of significant global economic weakness.
    • Potential outperformance in inflationary environments
      TIPS typically outperform traditional fixed rate Treasuries of equivalent maturities when inflation is higher than expected, or when inflation expectations are on the upswing (but likewise can be expected to underperform in declining inflationary environments).
     
  6. Trainee

    Trainee Well-Known Member

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    Its not just inflation though. State taxes in the US, and dividend franking in Australia changes the equation a lot.
     

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